I know what you asked and I answered this as clearly as I could. Often time you don't have customers, you only have prospective customers or think you will have customers.

Let me try to explain what I mean about the relationship between consumption and production and production's role in driving the economy forward.

Let's say you are stranded on a deserted island with only the clothes on your back, no readily available food or shelter. At this point it would be safe to say that you have a demand for consuming food and shelter. But this demand in and of itself does nothing. It is the next step that gets things rolling. The next steps are that you forgo current consumption and you invest your labor to produce something (i.e., father food by foraging, fishing or hunting). Only after production has occurred can you consume anything. Yes demand exists a priori, but this is already known. There is infinite demand for goods and services. It is production that cannot keep up with all of the demand and which drives an economy forward. And, in order to actually produce something, some degree of present consumption must be forgone (saved) in order to invest it in production. Thus it is saving and the corresponding investment into production that drives things forward.

What Keynesian "economics" suggests is that all that needs to happen is we need to get enough money into the hands of consumers. This is exactly the opposite. Yes, there are some consumers who lack money, but that doesn't also mean they lack all means of trade/exchange to obtain produced goods. That's a fairly superficial fallacy. The problem with Keynesian "economics" is that is assumes production will happen. It basically takes it for granted. The problem of wealth creation has always been about how productions happens. Demand is known and assumed (and correctly so).

There is infinite demand for FREE goods and services, however for goods and services that cost, demand may be less, or non-existent.

Sorta. For some goods there will be no demand even at a price of zero (or possibly even at a negative price). I get how the demand curve works. I also get that there elasticity issues associated with it (i.e., some things will continue to be in high demand despite increases in prices for a variety of reasons at least in the short term.) I also get that producers can end up producing something for which there is no demand (they guess wrong). That's part of the risk and uncertainty of the market. It's also why successful entrepreneurs and businesses deserve the profit they get...they guessed right in their production choices. But the fundamental point here is that people want things. They also have things. They have things they can and will exchange for the other things they want more. Minimally this is their labor or barter. In a more modern sense money acts as the intermediate form. But people always want (and need) things. What is always uncertain is whether or not someone will produce what they want (and for a price they're willing to pay.)

I must say that from what I've seen of your posts, I expect a much better understanding of this fundamental concept than this.

P.S. I just realized that we may actually really be misunderstanding each other. I never said that demand did not have a role in this or that it didn't precede production. I said that production precedes consumption. Maybe that helps here.

But the fundamental point here is that people want things. They also have things. They have things they can and will exchange for the other things they want more. Minimally this is their labor or barter. In a more modern sense money acts as the intermediate form. But people always want (and need) things. What is always uncertain is whether or not someone will produce what they want (and for a price they're willing to pay.)

We are completely in agreement on these points.

Perhaps I'm just not getting the previous point, but I completely disagree that there is limitless need for production. With most of the world's production needs fulfilled by outsourcing to China or other populous nations where labor costs are very low, there are other factors which drive consumption patterns, such as uncertainty at the consumer level, not just the producer level. Most of what is consumed in the modern world is unnecessary (in other words, not needed for survival), therefore the continual production of goods which are not "necessary" would be ill-advised. I typically agree with your comments also, so based on my personal experience and exposure with manufacturing, this is a point that does not square with reality. Perhaps there is a more general concept that you are floating that I'm not picking up on, but I also don't agree with elements of the links you posted from The Freeman, WealthIsNotTheProblem, and the other. I think we are still both in agreement that Keynesian economics is a fraud, and perhaps if not viewed in a vacuum and as part of a real-world scenario we may be in closer agreement.

but I completely disagree that there is limitless need for production.

Well we can never know for sure if it is truly limitless (i.e., infinity) for obvious logical reasons. And I used that phrase a bit casually and sloppily there I'll admit. But the history of economic development clearly shows that we all keep wanting more (at least in aggregate). Sure, some people decide to live a more modest and minimalist life. But in the large demand keeps growing not just for existing goods and services but for new and sometimes previously completely unimagined goods and services.

Quote:

Originally Posted by SpamSandwich

With most of the world's production needs fulfilled...

Nope. Most of the demand of the world is not met by current production. Far from it in fact.

Quote:

Originally Posted by SpamSandwich

there are other factors which drive consumption patterns, such as uncertainty at the consumer level, not just the producer level.

Of course. And uncertainty is quite a problem today. But I'd argue it is the producer's uncertainty that is holding things back more right now.

Quote:

Originally Posted by SpamSandwich

Most of what is consumed in the modern world is unnecessary (in other words, not needed for survival), therefore the continual production of goods which are not "necessary" would be ill-advised.

Well, to be fair, this is your opinion. And I might even agree. And to some degree it is factual (with regard to the bare minimum required to survive and live). But people want more than to just survive. They want much more.

Quote:

Originally Posted by SpamSandwich

I typically agree with your comments also, so based on my personal experience and exposure with manufacturing, this is a point that does not square with reality. Perhaps there is a more general concept that you are floating that I'm not picking up on, but I also don't agree with the links you posted from The Freeman, WealthIsNotTheProblem, and the other link.

OK

Quote:

Originally Posted by SpamSandwich

I think we are still both in agreement that Keynesian economics is a fraud.

Well we can never know for sure if it is truly limitless (i.e., infinity) for obvious logical reasons. And I used that phrase a bit casually and sloppily there I'll admit. But the history of economic development clearly shows that we all keep wanting more (at least in aggregate). Sure, some people decide to live a more modest and minimalist life. But in the large demand keeps growing not just for existing goods and services but for new and sometimes previously completely unimagined goods and services.

Nope. Most of the demand of the world is not met by current production. Far from it in fact.

Of course. And uncertainty is quite a problem today. But I'd argue it is the producer's uncertainty that is holding things back more right now.

Well, to be fair, this is your opinion. And I might even agree. And to some degree it is factual (with regard to the bare minimum required to survive and live). But people want more than to just survive. They want much more.

OK

After all is said and done, I think we are mostly in agreement on the generalities and whatever differences we may have are due to the peculiarities of each of our life experiences.

The Dept of Education employs 5000 people. Its budget is $68 billion this year, up from $42 billion before NCLB. Programs like it have had dubious success if any, and impede and interfere with the proper functions of locally elected and supported school boards.

It educates no one. Kill it.

Agreed. If we're going to subsidize state-run education, then let's just do it directly. Every district gets a certain amount per student.

Quote:

Originally Posted by BR

The Dow is back to 11,000. Corporations are making record profits again. Wall street is fine. The biggest lesson they learned from this mess is that even with 9.6% unemployment, they can make a metric fuck-ton of money. Why bother hiring back all those who were fired when those remaining do more work for less money and are too scared of losing their jobs to complain about it or try to find work elsewhere?

How do we fix this country? Easy.

End the culture of GREED.

"Greed" is exactly what makes the economy run. Profits are not evil.

Quote:

Originally Posted by MJ1970

Yes it is.

As to the business part of your statement, this is correct. But the overall gist of your statement is incorrect.

Correct. Mostly.

Eh, not as much.

I don't agree that it's Keynesian. I'm not suggesting the government gives people stimulus checks. I'm saying that people are able to keep more of their own money. I'm not suggesting that we focus exclusively on demand, either--as you see above.

I can only please one person per day. Today is not your day. Tomorrow doesn't look good either.

Greed is NOT good. Sorry Mr. Gecko. A little restraint and a little compassion would go a long way. How many jobs could have been saved if those at the top didn't vote themselves huge bonuses for cutting costs by cutting jobs?

“The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff.” -Sagan

1. Freeze money market funds on a Friday before a long weekend, do not let anybody withdraw money for several months, and then only at 10% of their initial balance per month.

2. Pass a special law Friday night that puts the entire S&P 500 into expedited bankruptcy. All bonds, preferred stock, credit default swaps and other long term debt are converted to common stock at the Friday close prices, all 500 companies are given until the end of the long weekend to work out the details, and one week (where trading in those debt instruments is frozen) to make the conversions.

3. One year moratorium on corporate taxes and payroll taxes for everybody other than the S&P500, this is because the businesses smaller than the top 500 will need help competing with the newly debt-free companies.

4. Pass a much more extensive set of banking regulation, that un-does all of the deregulation of the last 40 years, updated for modern finance.

5. Put tens of thousands of bankers in jail for fraud

6. Close all foreign military bases, we can not afford them anymore

7. End all corporate subsidies, particularly farm subsidies

8. Single payer healthcare, I believe it will lower medical costs and we can't afford to pay the $42 trillion in net present value of the baby boomer medical costs as they age.

You have good concepts which some might actually work.Number 6 I agree with completely. To much spending on these dam wars and these 3rd world countries especially where corruption runs amok.regulate the banks completely. They are out of control.

The Dow is back to 11,000. Corporations are making record profits again. Wall street is fine. The biggest lesson they learned from this mess is that even with 9.6% unemployment, they can make a metric fuck-ton of money. Why bother hiring back all those who were fired when those remaining do more work for less money and are too scared of losing their jobs to complain about it or try to find work elsewhere?

How do we fix this country? Easy.

End the culture of GREED.

Quote:

Why bother hiring back all those who were fired when those remaining do more work for less money and are too scared of losing their jobs to complain about it or try to find work elsewhere?

Some employers love this aspect of downturns. They can do anything and there isn't another job down the road for these people so they'll just take it. Disgusting. And it's shooting themselves in the foot because it's so short sighted. When things get better people tend to have memories of what happened and good workers leave. But that's the metality out there. It was that way in every recession I worked through in the 70's and 80's as well.

Without the need for difference or a need to always follow the herd breeds complacency, mediocrity, and a lack of imagination

Greed is NOT good. Sorry Mr. Gecko. A little restraint and a little compassion would go a long way. How many jobs could have been saved if those at the top didn't vote themselves huge bonuses for cutting costs by cutting jobs?

I think not very many, actually. That's what business does.

I can only please one person per day. Today is not your day. Tomorrow doesn't look good either.

I've heard this many times before, sometimes even from the pulpit and I totally disagree. Greed is not what drives the economy. This is a word that has almost lost its meaning because it is thrown around so often and carelessly.

Quote:

Greed is an excessive desire to possess wealth or goods; Greed (Latin, avaritia), also known as avarice or covetousness, is, like lust and gluttony, a sin of excess. Greed is inappropriate expectation. However, greed is applied to [B]a very excessive or rapacious desire and pursuit of wealth, status, and power[/U].

This does not describe how most people in the market operate. One will also note that greed isn't simply about money but also status and power. It also doesn't say that someone who is wealthy is greedy. Poor people can be greedy as well. Greed is not at all limited to people in the marketplace. Greed does exists in a wide variety of places and social domains including government, religious institutions and even non-profits organizations.

People having a desire for a better life is not greed. People simply looking our for their interests and those of their families is not greed. People earning a lot of money or profit is not greed.

I'd also note that those shouting "greed!" are almost always looking up. In other words, they appear to have no concept that the family that's living in poverty in Africa might envision them as greedy with their rather modest (by American standards) lifestyle.

P.S. BR, you haven't told us how exactly you think we can or should "end the culture of greed."

Some employers love this aspect of downturns. They can do anything and there isn't another job down the road for these people so they'll just take it. Disgusting. And it's shooting themselves in the foot because it's so short sighted. When things get better people tend to have memories of what happened and good workers leave. But that's the metality out there. It was that way in every recession I worked through in the 70's and 80's as well.

I think this is a view that many Democrats have, particularly blue collar workers. Though, I think you're a white collar worker, if I remember correctly.

The only thing I can tell you is that I disagree wholeheartedly with your statement (in bold). No business I've ever seen enjoys a downturn. Now, you say that you've worked through recessions, so clearly that has shaped your views. What experiences did you have that caused you to embrace such thinking?

On my end, I find that statement unbelievable. First, corporations don't need excuses to downsize. If they feel downsizing will help their bottom line and not adversely affect their business model, they'll do it...no matter what the economy is like. In good times, they can afford to have extra people employed. In bad times, they have to make cuts to have a healthy bottom line. It's not disgusting in the slightest...it's business.

I can only please one person per day. Today is not your day. Tomorrow doesn't look good either.

Some employers love this aspect of downturns. They can do anything and there isn't another job down the road for these people so they'll just take it.

So... how do you feel about workers/unions demanding (requesting/expecting) pay RAISES when the business/economy is booming?

These workers just expect to get pay raises because a company is doing good!... They're taking advantage of an up economy and screwing their company/boss/shareholders and the company can't do anything about it because there are more empty jobs than quality workers to fill them !!!!

From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...

So... how do you feel about workers/unions demanding (requesting/expecting) pay RAISES when the business/economy is booming?

These workers just expect to get pay raises because a company is doing good!... They're taking advantage of an up economy and screwing their company/boss/shareholders and the company can't do anything about it because there are more empty jobs than quality workers to fill them !!!!

I used to be anti-union, but I've come to accept the right of people to bargain en masse with an employer, HOWEVER if the union is too heavy-handed (just as an employer could be too heavy-handed) they may end up out of a job or destroy the very company they attempt to negotiate with. Also, I don't think a union should be protected by the government any more than an oil company should be subsidized (for example).

I used to be anti-union, but I've come to accept the right of people to bargain en masse with an employer,

Absolutely! They absolutely have this right. Which is to say they have the right to attempt to exercise group negotiation with an employer. An individual should have a right to delegate negotiation of his employment agreement to a larger body (the union). However, they don't have the right to force the other side to accept this negotiation. The individual should also have the right to opt out of the union (which they don't in some cases.)

Quote:

Originally Posted by SpamSandwich

HOWEVER if the union is too heavy-handed (just as an employer could be too heavy-handed) they may end up out of a job or destroy the very company they attempt to negotiate with.

Indeed.

Quote:

Originally Posted by SpamSandwich

Also, I don't think a union should be protected by the government any more than an oil company should be subsidized (for example).

This is the real problem. Many unions get special protection under the law over and above the simple, basic and natural right to act as a group.

I've heard this many times before, sometimes even from the pulpit and I totally disagree. Greed is not what drives the economy. This is a word that has almost lost its meaning because it is thrown around so often and carelessly.

This does not describe how most people in the market operate. One will also note that greed isn't simply about money but also status and power. It also doesn't say that someone who is wealthy is greedy. Poor people can be greedy as well. Greed is not at all limited to people in the marketplace. Greed does exists in a wide variety of places and social domains including government, religious institutions and even non-profits organizations.

People having a desire for a better life is not greed. People simply looking our for their interests and those of their families is not greed. People earning a lot of money or profit is not greed.

I'd also note that those shouting "greed!" are almost always looking up. In other words, they appear to have no concept that the family that's living in poverty in Africa might envision them as greedy with their rather modest (by American standards) lifestyle.

P.S. BR, you haven't told us how exactly you think we can or should "end the culture of greed."

I don't think we really need to get into a philosophical/semantical argument about greed here.

I can only please one person per day. Today is not your day. Tomorrow doesn't look good either.

I don't think we really need to get into a philosophical/semantical argument about greed here.

Well, I disagree. I don't think this a philosophical/semantical point per se. It's about using the fucking word in the right way, at the right time and to describe the right thing. I'm sorry if my pointing out the definition of the word threw some cold water on your facile and simplistic "greed is what makes the economy go 'round" theory, but words have meanings.

Well, I disagree. I don't think this a philosophical/semantical point per se. It's about using the fucking word in the right way, at the right time and to describe the right thing. Words have meanings.

OK, I'm not getting into it. I don't disagree with you.

I can only please one person per day. Today is not your day. Tomorrow doesn't look good either.

NO! Don't end the greed! Huge corporations need to continue to post record profits each year. The more money they make then the more people they hire! right?. I see it in the news all the time. "Exxon Mobil posts record profits and hires 10,000 people to celebrate" and "The Walton family of Wal-Mart decides that having 89.5 Billion in the bank is enough and will now pay employees above minimum wage!" If being able to dump toxic chemicals into the water table instead of properly disposing of them helps corporations make more money then I am all for it. Just think of how much more money these companies could make if it wasn't for the FDA, EPA, and OSHA. Get rid of them now!

P.S. The purpose of a company is not to create jobs. It creates jobs as a function of other things it is trying to do.

Exactly. I was attempting to point out that some wrongly think if we lower the tax on businesses that they will hire more people.

The minimum wage may have not been the perfect example. It is primarily meant to help the poor areas of our nation and is close to irrelevant in much of America. I will list another incorrect reasons that some despise our progressive tax system......

Dont make rich people pay more tax because one day Ill be rich and I wont want to pay tax The American Delusion

It may be meant to, that it doesn't and, in fact, actually hurts many of them should be no concern to us, because all that matters are good intentions.

Having a minimum wage hurts the poor?

Quote:

Well, arguably, the progressive income tax scheme is an anti-wealth accumulation tax. It is a treadmill that increases in grade for those climbing up it.

Exactly, I would rather be taxed after I have become wealthy than before. Commonly it takes money to make money and so as it gets easier for a person they get taxed at a higher rate. This balances if not reverses your incline theory. There is a base fee to exist (the cost of food,shelter,etc) That is why we get taxed at a lower percentage on our first X amount of income and at a higher percentage on the income beyond that. So... you wish to lower taxes on the wealthy and raise taxes on the poor to make things "even and fair"?

So... you wish to lower taxes on the wealthy and raise taxes on the poor to make things "even and fair"?

Well since, from an income tax perspective, the poor aren't really paying anything anyway, the only way to reduce their taxes would be to give them tax "rebates" on taxes they haven't paid. At that point we have outright and naked redistribution. \

What I wish for is lower taxes overall for everyone (including eliminating the income tax completely.) This requires lower spending and much less redistribution.

NO! Don't end the greed! Huge corporations need to continue to post record profits each year. The more money they make then the more people they hire! right?. I see it in the news all the time. "Exxon Mobil posts record profits and hires 10,000 people to celebrate" and "The Walton family of Wal-Mart decides that having 89.5 Billion in the bank is enough and will now pay employees above minimum wage!" If being able to dump toxic chemicals into the water table instead of properly disposing of them helps corporations make more money then I am all for it. Just think of how much more money these companies could make if it wasn't for the FDA, EPA, and OSHA. Get rid of them now!

Businesses will expand and hire more people as they are able. If they are not able, they won't. They are in business to make money. This is the foundation of our global capitalist system.

And no one is suggesting we set out to make life easier for the mega corporations. But we should realize that onerous restrictions cause them to change their behavior. They are not going to sit back and let the government attack them. They'll just move.

Quote:

Originally Posted by Gafflation

Exactly. I was attempting to point out that some wrongly think if we lower the tax on businesses that they will hire more people.

No, I'm afraid you're the one who is wrong. Ridiculously wrong, actually. A better tax environment for businesses will result on those businesses having more opportunity to expand. To expand, they must hire more people.

Quote:

The minimum wage may have not been the perfect example. It is primarily meant to help the poor areas of our nation and is close to irrelevant in much of America. I will list another incorrect reasons that some despise our progressive tax system......

Dont make rich people pay more tax because one day Ill be rich and I wont want to pay tax The American Delusion

Which areas of the country are those?

Quote:

Originally Posted by Gafflation

Having a minimum wage hurts the poor?

I don't think it hurts them. I also don't think it helps much.

Quote:

Exactly, I would rather be taxed after I have become wealthy than before. Commonly it takes money to make money and so as it gets easier for a person they get taxed at a higher rate. This balances if not reverses your incline theory. There is a base fee to exist (the cost of food,shelter,etc) That is why we get taxed at a lower percentage on our first X amount of income and at a higher percentage on the income beyond that. So... you wish to lower taxes on the wealthy and raise taxes on the poor to make things "even and fair"?

You're describing out current system of progressive taxation. For the most part, it makes sense. I'm not aware of anyone suggesting we lower taxes on the wealthy for the purpose of "making things fair."
However, lowering taxes on the people that pay the taxes is the only way to go. Giving money to the poor in rebates is useless and ineffective.

I can only please one person per day. Today is not your day. Tomorrow doesn't look good either.

Well since, from an income tax perspective, the poor aren't really paying anything anyway, the only way to reduce their taxes would be to give them tax "rebates" on taxes they haven't paid. At that point we have outright and naked redistribution. \

What I wish for is lower taxes overall for everyone (including eliminating the income tax completely.) This requires lower spending and much less redistribution.

I didn't post anything about lowering the tax rate on the poor. You have made it clear you want all Bush Tax cuts extended and I have made it clear that I want all of them all to expire.

Obviously you would caucus with the Republicans but would you describe yourself as Libertarian if you had to classify yourself? By much less spending and redistribution you would eliminate or make severe cuts to all entitlements along with moderate defense cuts?

... Entire departments would be eliminated or vastly reduced, including the Dept. of Education, the IRS, and so many more

The Dept of Education employs 5000 people. Its budget is $68 billion this year, up from $42 billion before NCLB. Programs like it have had dubious success if any, and impede and interfere with the proper functions of locally elected and supported school boards.

It educates no one. Kill it.

As if we needed any more reason... guess which formerly great nation tied for dead last in 2009 math achievement scores. Other subjects aren't doing so well either.

With the tax cuts directed at the top 2%, we could have funded pre-school education nationwide. That would have helped.

Once again, probably not.

Your statement is based on the assumption that those who are threatened with this additional taxation would simply sit there and take it. This is almost certainly and incorrect assumption. Those threatened with the confiscation of their property usually adjust and those with higher incomes (certainly those in the "top 2%") typically have much greater flexibility and making adjustments to avoid this confiscation typically rendering this tax ineffective or (usually) worse.

This is the fatal assumption that all "soak the rich" initiatives is based on...that they won't do anything to defend themselves.

This is the fatal assumption that all "soak the rich" initiatives is based on...that they won't do anything to defend themselves.

Yet another reason the income tax is inherently flawed. It's broken. Tweaking an inherently flawed concept is pointless. Even a flat tax won't fix it.

Scrap it.

Find that country yet?

I chose just one example after a cursory search, but there are a few that are very similar. All of them are capitalist havens - some very large multinational corporations are based in them, due to a favorable business climate.

I don't see a thread where people discuss their ideas on what will work for both issues, which are obviously interrelated. Thought I'd start one, as I think we can all agree that action of some sort needs to be taken. We all share the same goal in seeing both "fixed," or so I would think.

So, what can the government do help ensure short and long term economic growth? What do we do about the national debt and the current deficit levels? What can we change about the tax code and the way we fund entitlements?

I'll write some thoughts a bit later. Off to teach the leaders of tomorrow.....

get rid of Tim G who truthfully is on the side of large corporations not the people!Stop borrowing money from China and start making products in the USA.Really start to control big banks and wall street not the crap Obama try to do.Start with this and go from there.

I think this is a view that many Democrats have, particularly blue collar workers. Though, I think you're a white collar worker, if I remember correctly.

The only thing I can tell you is that I disagree wholeheartedly with your statement (in bold). No business I've ever seen enjoys a downturn. Now, you say that you've worked through recessions, so clearly that has shaped your views. What experiences did you have that caused you to embrace such thinking?

On my end, I find that statement unbelievable. First, corporations don't need excuses to downsize. If they feel downsizing will help their bottom line and not adversely affect their business model, they'll do it...no matter what the economy is like. In good times, they can afford to have extra people employed. In bad times, they have to make cuts to have a healthy bottom line. It's not disgusting in the slightest...it's business.